Economy

Nigeria Needs Full Tax Reform—IMF

Published

7 years ago

31/10/2017

Dipo Olowookere

By Dipo Olowookere

The International Monetary Fund (IMF) has advised Nigeria to embark on a full Value Added Tax (VAT) reform.

With this in place, according to the global lending firm, the country’s economy would be on the way to full recovery.

The lender’s Mission Chief for Nigeria, African Department, Mr Amine Mati, who was a guest at the 2017 Chartered Institute of Bankers of Nigeria (CIBN) Investiture in Lagos last weekend, said government must raise taxes where necessary, especially on luxury items.

According to Mr Mati, the Federal Government must broaden its VAT system by revisiting exemptions.

At the event themed ‘Coherent set of Policies for Greater Exchange Rate Flexibility, the IMF chief in Nigeria said government should consider cancelling tax holidays and exemptions that erode the Company Income Tax (CIT) base.

In addition, government should also increase taxes on alcohol and tobacco and broaden VAT by revisiting exemptions, he said.

Mr Mati noted that if the Federal Government can work reform its tax system, the economy would be jumpstarted.

Lately, Nigeria has looked toward tax to generate more revenue due to its fall into recession last year.

Minister of Finance, Mrs Kemi Adeosun, has consistently said the government intends to increase its revenue by increasing its tax base.

According to Federal Inland Revenue Service (FIRS), the total number of tax payers in Nigeria is just 12,649,654 [as at April 2017]. Of these, 96 percent have their taxes deducted at source under PAYE and just 4 percent comply with Direct Assessment.

In June 2017, the Federal Government launched the Voluntary Asset and Income Declaration Scheme (VAIDS).

The platform was put in place for defaulting Nigerian taxpayers to work out a flexible way to pay their outstanding tax liabilities due from them relating to the last six relevant tax years, regularize their tax transactions and obtain genuine tax clearance certificates for all the relevant years without fear of criminal prosecution for tax offences and with the benefit of forgiveness of interest and penalties.

Mrs Adeosun had stated at the launch of the initiative that the policy embraces all federal and state taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax, Tenement Rates, Property Taxes.

Earlier this month, the Finance Minister said Nigeria will reduce the rate at which it borrows money for developmental projects only if the tax to gross domestic product (GDP) hits 10 percent.

At the moment, the country’s tax to GDP ratio is at 6 percent.

“We must pay taxes properly in Nigeria, if we do this, we do not need to borrow.

“Of course I am not suggesting that there isn’t responsibility on the part of government; we have to be more responsible, to be more efficient (when people citizens pay their taxes).

“We are really focusing on this, we are finding ways to cut cost, but fundamentally, we must invest but we don’t have the power we need, the roads, we are working in progress.

“A lot of money is needed to reposition this economy and we need to generate more through tax.

“We just need to move our tax to GDP from 6 percent from where it is now to 10 percent; it will significantly reduce the amount of money we need to borrow and that will have a wider effect on the economy.

“One, it would reduce the demand for short-term borrowing and help bring down interest rate.

“Two, it would create headroom for the private sector to borrow; that is the strategy,” Mrs Adeosun had said.

At the 3rd International Conference on Tax in Africa (ICTA) held in Abuja from September 25 to 29, 2017, stakeholders highlighted the need for African countries to build stronger domestic tax regimes by strengthening VAT, PIT and CIT.

At the Pan-African Conference on Illicit Financial Flows (IFFs) from Africa organised by Tax Justice Network Africa (TJNA) in Nairobi, Kenya, it was said that Africa has lost over $50 billion to multinationals who take advantage of weak tax laws and unfair trade treaties on the continent.

Economy

Afriland Properties, Geo-Fluids Shrink OTC Securities Exchange by 0.06%

Published

5 hours ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.

The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.

Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.

At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.

The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.

When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.

Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.

Economy

Naira Weakens to N1,547/$1 at Official Market, N1,670/$1 at Black Market

Published

6 hours ago

12/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The euphoria around the recent appreciation of the Naira eased on Wednesday, December 11 after its value shrank against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N5.23 or 0.3 per cent to N1,547.50/$1 from the N1,542.27/$1 it was valued on Tuesday.

It was observed that spectators’ activities may have triggered the weakening of the local currency in the official market at midweek as they tried to fight back and ensure the value of funds in foreign currencies strengthened.

The domestic currency was regaining its footing after the Central Bank of Nigeria (CBN) launched an Electronic Foreign Exchange Matching System (EFEMS) platform to tackle speculation and improve transparency in Nigeria’s FX market.

At midweek, the Nigerian currency depreciated against the Pound Sterling by N3.56 to close at N1,958.68/£1 compared with the preceding day’s N1,955.12/£1 and against the Euro, it slumped by 34 Kobo to trade at N1,612.66/€1, in contrast to the previous session’s N1,613.00/€1.

As for the black market segment, the Naira lost N45 against the American currency during the session to quote at N1,670/$1 compared with the N1,625/$1 it was traded a day earlier.

A look at the cryptocurrency market showed a recovery following profit-taking as the US Consumer Price Index report matched economist forecasts.

The news was enough to convince traders that the Federal Reserve is certain to trim its benchmark fed funds rate another 25 basis points at its meeting next week.

The move also saw Bitcoin (BTC), the most valued coin, return to the $100,000 mark as it added a 2.9 per cent gain and sold for $100,566.12.

The biggest gainer was Cardano (ADA), which jumped by 15.00 per cent to trade at $1.16, as Litecoin (LTC) appreciated by 10.4 per cent to sell for $121.76, and Ethereum (ETH) surged by 7.0 per cent to $3,929.30, while Dogecoin (DOGE) recorded a 6.7 per cent growth to finish at $0.4181.

Further, Binance Coin (BNB) went up by 5.2 per cent to $716.72, Solana (SOL) expanded by 4.6 per cent to $229.77, and Ripple (XRP) increased by 4.2 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.

Economy

Dangote Refinery Makes First PMS Exports to Cameroon

Published

7 hours ago

12/12/2024

Aduragbemi Omiyale

By Aduragbemi Omiyale

The Dangote Refinery located in the Lekki area of Lagos State has made its first export of premium motor spirit (PMS) just three months after it commenced the production of petrol.

In September 2024, the refinery produced its first petrol and began loading to the Nigerian National Petroleum Company (NNPC) on September 15.

However, due to some issues, the facility has not been able to flood the local market with its product, forcing it to look elsewhere.

In a landmark move for regional energy integration, Dangote Refinery has partnered with Neptune Oil to take its petrol to neighbouring Cameroon.

Neptune Oil is a leading energy company in Cameroon which provides reliable and sustainable energy solutions.

Dangote Refinery said this development showcases its ability to meet domestic needs and position itself as a key player in the regional energy market, adding that it represents a significant step forward in accessing high-quality and locally sourced petroleum products for Cameroon.

“This first export of PMS to Cameroon is a tangible demonstration of our vision for a united and energy-independent Africa.

“With this development, we are laying the foundation for a future where African resources are refined and exchanged within the continent for the benefit of our people,” the owner of Dangote Refinery, Mr Aliko Dangote, said.

His counterpart at Neptune Oil, Mr Antoine Ndzengue, said, “This partnership with Dangote Refinery marks a turning point for Cameroon.

“By becoming the first importer of petroleum products from this world-class refinery, we are bolstering our country’s energy security and supporting local economic development.

“This initial supply, executed without international intermediaries, reflects our commitment to serving our markets independently and efficiently.”